Sales Slide Drives Gm To 7.7% Financing

General Motors Corp., as expected, Thursday began offering 7.7 percent financing on 1.3 million cars and trucks purchased from existing dealer inventories.

GM said the program is aimed at clearing out 1985 models prior to introductions of 1986 cars. Industry analysts said it was designed to halt GM`s sales slide.

The eligible vehicles--925,000 cars and 370,000 trucks--represent more than 70 percent of all GM`s nameplates.

Analysts said the program could touch off another discount-financing war among automakers. But both Ford Motor Co., which has no current financing programs, and Chrysler Corp., which offers 8.8 percent financing on its compact LeBaron GTS and Lancer and 8.8 percent financing or a $400 rebate on its compact Dodge Aries and Plymouth Reliant, said they were evaluating GM`s program before deciding whether to offer new programs of their own.

GM said the program will run for seven weeks, through Oct. 2. In order to give the financing incentive sufficient time to reduce inventories, GM said it also has moved back its 1986 model introductions until Oct. 3.

``We were going to introduce the 1986s on Sept. 26, but with the financing plan and as a result of the haulers strike, we`ve now pushed that back. . . ,`` said GM spokesman Harold Jackson.

The rate is the lowest ever offered by General Motors Acceptance Corp., GM`s financing subsidiary. It will result in an average savings of $1,550 and up to as much as $2,250 on financing charges, GM said. About three-quarters of all GM car buyers finance their purchases.

GM said about 60 percent of 1985 production was delivered prior to the start of the nationwide car-hauler strike and already is at dealerships. A tentative agreement in the nearly three-week walkout by haulers was reached Wednesday.

Analysts believe the goal of the financing program is to help GM recover its share of domestic car sales, which has declined by 3 to 5 percentage points this year to about 56 percent. Traditionally, each 1 point loss in market share translates into 100,000 cars lost to domestic and foreign competitors.

``Customers have demonstrated they`ll respond to significantly lower interest rates,`` said James G. Vorhes, vice president in charge of GM`s sales staff. ``They`re ready and able to buy. This (will) stimulate the marketplace and increase GM`s position in coming weeks.``

GM car sales have declined since mid-June, when the company ended an 8.8 percent financing program. Led by GM`s slide, the domestic auto industry has reported lower sales in each of the last six 10-day reporting periods. In July, GM announced a 9.9 percent financing program on its luxury Oldsmobile 98, Buick Electra, and Cadillac DeVille, but that effort was too little and too late to reverse the sales decline, according to analysts.

``The program was needed to halt GM`s sales skid and help it recover market share,`` said Phil Fricke, an analyst with Goldman, Sachs & Co. in New York. ``With the haulers strike resolved, GM has the cars ready to ship to dealers and wants to make sure those cars are bought by consumers.``

But Fricke believes the 7.7 percent financing program eventually will have a negative impact because it ``reinforces consumers` conditioned behavior that if they wait to buy, something will happen.``

To help fund the program, GM has reduced its traditional year-end discount to dealers to 2.5 percent from 5 percent. That means that on Oct. 3, when 1986 models go on sale, dealers will receive a 2.5 percent allowance on all leftover 1985s rather than 5 percent.

In addition to the financing program, GM has reduced monthly lease fees on selected cars ranging from a $22 reduction on a Chevrolet Chevette to a $67 savings on a Cadillac DeVille.